Draft of the General Principles of Civil Law: Virtual property and digital currency will be protected by law in China

Author : Amber Dingding

On June 27, the 21st meeting of the 12th National People's Congress Standing Committee was held in Beijing. The meeting reviewed for the first time the explanation of the "General Principles of the Civil Law of the People's Republic of China (Draft)" proposed by the Chairman's Meeting of the Standing Committee of the National People's Congress. In particular, it made clear provisions on new civil rights objects such as network virtual property and data information, which means that network virtual (currency) property and data information will be protected by law.

A closer look at the draft revealed that there are two articles involving online virtual currency and data information. They are Article 104: Property includes real estate and movable property. Where the law stipulates that specific rights or online virtual property are the objects of property rights, they shall be governed by such provisions. And Article 108, paragraph 2, item 8: (Intellectual property rights include) data information.

Trends in property law in civil law

Earlier, the relevant provisions of the Constitution and the General Principles of the Civil Law on online virtual property were relatively general, leaving a certain amount of room for interpretation. However, after the amendment of the Constitution in 2004, the protection of citizens' legal private property was clearly included in the Constitution. This general provision of legal private property provides a great deal of room for the interpretation of civil law property. In addition, the General Principles of the Civil Law stipulates that "citizens' personal property includes citizens' legal income, houses, savings, daily necessities, cultural relics, books and materials, forests, livestock, and means of production that citizens are allowed to own by law, as well as other legal property." Although there is no clear legalization of online virtual property, there is no clear legal provision for "other legal property", which leaves a certain amount of room for interpretation.

The central bank has also responded to relevant provisions regarding virtual currency.

The "Notice on Preventing Bitcoin Risks" issued by the central bank in 2013 also clarified the nature of Bitcoin, stating that Bitcoin is not issued by monetary authorities, does not have monetary attributes such as legal tender and compulsory nature, and is not a real currency.

Moreover, as a specific virtual commodity, Bitcoin does not have the same legal status as currency and cannot and should not be circulated and used as currency in the market.

However, Bitcoin transactions are a form of commodity trading on the Internet, so ordinary people have the freedom to participate at their own risk.

How to protect rights when disputes arise from virtual property

With the development of the Internet, disputes caused by virtual property and data information continue to arise. For example, the DAO incident that happened not long ago, how to define the leakage and theft of online accounts, how to protect the rights of private data property information leakage, etc. are all problems that have been troubling. For such cases, due to the difficulty in obtaining evidence, unclear legal provisions, and the secrecy of the perpetrators, similar cases have been shelved again and again. In addition, there are currently existing cases such as the theft of a large number of online accounts, the theft of game accounts and game coins, etc., which all rely on manufacturers to protect their rights.

The official release of the "General Principles of the Civil Law of the People's Republic of China (Draft)" will also solve some problems.

At present, there are still many virtual property rights protection issues that need to be resolved. For example, the pricing of digital currency, the price difference between various digital currency companies, and at the same time, there are also issues such as credibility. In addition, virtual currency is a set of data stored in a computer, and its characteristic is that it can be copied infinitely, and its true value is controversial. Data information represented by big data is even more difficult to price in the market, and the pricing in different application scenarios is different. For this reason, there is still a long way to go in the protection of virtual currency rights.